# The future of fintech and open source cloud solutions in the United Kingdom
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-12
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Open Source Cloud Empowering UK Financial Services Sector
Meta Description: Discover how open source cloud technologies are transforming the financial services sector in the UK, driving innovation and meeting customer demand.
URL: https://financedigest.com/the-future-of-fintech-and-open-source-cloud-solutions-in-the-united-kingdomhtml

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_By_ **_Kris Sharma,_** _Financial Services Sector Leader at_ [_Canonical_](http://canonical.com/) _, on why open source cloud is empowering the financial services sector in Britain_

According to KPMG, investment in the UK’s fintech sector reached a new high of [$37.3bn in 2021](https://home.kpmg/uk/en/home/media/press-releases/2022/02/uk-fintech-investment-soars-to-37-billion-in-2021.html#:~:text=resend%20verification%20email.-,UK%20fintech%20investment%20soars%20to%20%2437.3,2021%20%E2%80%93%20up%20sevenfold%20from%202020&text=Total%20UK%20fintech%20investment%20hit,published%20today%20(7%20February).) in value, a 600% increase compared to 2020. Cloud-native innovation is currently saturating the market as financial service organisations continue to rely on cloud technologies – specifically open source private cloud – to accelerate their transformation efforts.

Cloud computing is no longer cutting-edge technology but is part of mainstream IT, making businesses more agile, cutting costs and offering access to potential new revenue streams. In particular, cloud technologies power innovation by harnessing emerging technologies such as [Artificial Intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "Types of artificial intelligence") (AI) and blockchain. Start-ups and established [financial institutions](https://www.financedigest.com/the-future-of-financial-institutions-in-2023.html "The Future of Financial Institutions in 2023") are leveraging the collaborative energy of open source. At the heart of open source is a collaborative and unfastened philosophy where professionals can inspect, modify, and enhance cloud-based systems. The potential here is massive, with the open source market set to grow 24% by 2025, according to a [study from Research and Markets](https://www.researchandmarkets.com/reports/5304240/open-source-services-global-market-trajectory#src-pos-1).

The Covid-19 crisis accelerated [digital transformation](https://www.financedigest.com/how-digital-is-transforming-finance-in-2023.html "How Digital Is Transforming Finance in 2023") in the financial services sector, but customers now demand more innovative services and experiences. Challenger [banks have meant the whole industry](https://www.financedigest.com/how-open-banking-will-change-the-banking-industry-in-the-next-10-years.html "How Open Banking will change the banking industry in the next 10 years") has had to level up and provide seamless, consumer-friendly services that help people manage their money more effectively. For [financial services](https://www.financedigest.com/devops-the-secret-tool-thats-transforming-financial-services.html "DevOps: The Secret Tool that’s Transforming Financial Services"), open source cloud technology will be vital in meeting this demand. The next few [years will be critical for market leaders in this sector](https://www.financedigest.com/2020-the-paradoxical-year-that-has-reshaped-the-future-of-motor-insurance-and-related-sectors.html "2020: The paradoxical year that has reshaped the future of motor insurance and related sectors") as they adapt to a rapidly transforming landscape.

In this environment, market leaders are integrating multiple [cloud platforms to harness the business value of emerging technologies](https://www.financedigest.com/7-ways-cloud-technology-can-transform-business-finances.html "7 ways cloud technology can transform business finances"), which we have also found ourselves. [Research by Canonical](https://canonical.com/blog/financial-services-businesses-say-multi-cloud-is-central-to-their-plans-for-ai-containers-and-blockchain-451-research-reveals) has found that around 60% of financial services businesses expect to use multi-cloud (a mixture of on-premises and externally hosted infrastructure).

**The UK as a fintech** [innovation hub](https://www.financedigest.com/setsquared-helps-turn-basingstoke-into-the-souths-next-tech-and-innovation-hub.html "SETsquared helps turn Basingstoke into the South’s next tech and innovation hub")

Britain remains at the forefront of fintech innovation worldwide, with UK-based fintech companies attracting more funding than companies across the rest of EMEA combined, [according to KPMG’s research](https://home.kpmg/uk/en/home/media/press-releases/2022/02/uk-fintech-investment-soars-to-37-billion-in-2021.html#:~:text=resend%20verification%20email.-,UK%20fintech%20investment%20soars%20to%20%2437.3,2021%20%E2%80%93%20up%20sevenfold%20from%202020&text=Total%20UK%20fintech%20investment%20hit,published%20today%20(7%20February).). [Payment technologies are key to this sector](https://www.financedigest.com/combatting-economic-uncertainty-in-2023-with-the-payments-sector-2.html "Combatting economic uncertainty in 2023 with the payments sector"), which is why it saw the most investment in the country in 2021 compared to other innovations in the industry. But British fintech companies are also innovating across everything from [wealth and asset management](https://www.financedigest.com/analysis-credit-suisse-collapse-threatens-switzerlands-wealth-management-crown.html "Analysis-Credit Suisse collapse threatens Switzerland’s wealth management crown") to cybersecurity.

For [financial institutions](https://www.financedigest.com/what-the-future-holds-for-financial-institutions-in-2023.html "What the Future Holds For Financial Institutions in 2023") in the UK, innovation is no longer an optional ‘nice to have’, as they are surrounded by competition pioneering the latest and greatest in financial technology. Companies must embrace these new [technologies and innovate internally to stay afloat](https://www.financedigest.com/digital-technology-and-startups-during-a-recession-how-to-stay-afloat.html "Digital Technology and Startups During a Recession — How to Stay Afloat") in a changing market.

**The advantages of open source for** [financial institutions](https://www.financedigest.com/a-cloud-migration-guide-for-financial-institutions.html "A Cloud Migration Guide for Financial Institutions")

In this highly competitive market, financial services [companies face the challenge of keeping](https://www.financedigest.com/in-listening-mode-new-bayer-ceo-keeps-open-mind-on-company-split.html "In listening mode, new Bayer CEO keeps ‘open mind’ on company split") pace, where open source technologies can be transformative. A hybrid or multi-cloud setup, based on open technologies, [offers key advantages like flexibility](https://www.financedigest.com/britain-urges-banks-to-offer-mortgage-flexibility-in-cost-of-living-crisis.html "Britain urges banks to offer mortgage flexibility in cost-of-living crisis"). This allows [financial services](https://www.financedigest.com/tomorrows-world-how-cloud-computing-will-impact-the-financial-services-sector-in-2016.html "TOMORROW’S WORLD: HOW CLOUD COMPUTING WILL IMPACT THE FINANCIAL SERVICES SECTOR IN 2016") to quickly respond to innovation in the broader market while keeping pace with regulatory requirements. For financial services companies, agility tops the reason they are adopting cloud technology, with 47% citing it as a driver, according to a [survey by 451 Research](https://ubuntu.com/engage/finserv-multi-cloud). Additionally, data privacy requirements and regulatory compliance mean financial services companies have to think carefully about where customer data is stored and where applications are running – hence why an [open source private](https://www.financedigest.com/barclays-private-bank-opens-new-office-in-verbier-switzerland-for-2022-23-ski-season.html "Barclays Private Bank opens new office in Verbier, Switzerland for 2022/23 Ski Season") cloud is a perfect choice for many fintech businesses.

Open source [cloud technology will also be crucial for companies](https://www.financedigest.com/green-cloud-one-way-your-company-can-commit-to-sustainability.html "Green Cloud: one way your company can commit to sustainability") as they engage with emerging technologies, thanks to standardised platforms such as Kubernetes. Open source private [cloud means that companies can be more daring in embracing](https://www.financedigest.com/embracing-cloud-computing-how-and-why-organisations-are-set-to-invest-more-in-cloud-computing-in-2023.html "Embracing Cloud Computing: How and why organisations are set to invest more in cloud computing in 2023") emerging technology; compared to legacy data centres, there’s a significantly lower total cost of ownership (TCO) over time. This allows [financial services companies to experiment with technologies that will be central to the sector’s evolution](https://www.financedigest.com/the-future-of-financial-services-tech-evolution-not-revolution.html "The future of financial services: Tech evolution not revolution "), such as AI and blockchain. Perhaps most crucially, open source private clouds can also scale at speed, [offering financial institutions the chance to add extra cloud resources](https://www.financedigest.com/copper-miner-teck-resources-rejects-glencores-22-5-billion-offer.html "Copper miner Teck Resources rejects Glencore’s .5 billion offer") to meet demand as needed.

**Looking forward**

Looking ahead, the next few years will be critical for the UK’s [financial services](https://www.financedigest.com/wrapping-financial-services-in-a-security-blanket.html "Wrapping Financial Services in a Security Blanket"), as cloud platforms enable the sector’s outdated technologies and practices to be transformed. Open source private clouds are poised to play an important role, allowing for much-needed engagement with new technologies.

Thinking further afield, financial services [must collaborate with other emerging tools beyond the cloud](https://www.financedigest.com/why-finance-professionals-must-bank-on-a-journey-to-the-cloud.html "Why finance professionals must bank on a journey to the cloud"), such as hybrid IT architectures, to lay a foundation for robust and rapid change. Organisations that use these technologies will be at the forefront and thus more likely to succeed in the coming years, having capitalised on the [emerging opportunities](https://www.financedigest.com/digital-payments-an-explosion-of-emerging-opportunities.html "Digital Payments: An Explosion of Emerging Opportunities") that open source cloud technology provides.


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